After a deal with a developer who planned to build on Grand Avenue in Baldwin fell through in 2018, the Town of Hempstead is moving forward with plans to implement an overlay district downtown to encourage developers to build and revitalize the area.

At a public meeting at the Baldwin Public Library on June 25, Town of Hempstead officials said that a contract between the town and the Engel Burman Group, to build on a string of vacant lots on Grand Avenue, between the firehouse and Merrick Road, could not be finalized. The developers planned to construct a mixed-use development.

Hempstead Town Supervisor Laura Gillen told a room of more than 50 residents that the contract, which was awarded by the previous town administration in 2017, contained a faulty financing clause involving the Town of Hempstead Industrial Development Agency.

“The project counted on certain exemptions from the IDA that the project didn’t qualify for,” town spokesman Mike Fricchione said after the meeting. The contract included a public funding mechanism that counted on tax-exempt bonds that the IDA could not legally provide, town officials said.

But IDA Chief Executive Officer Fred Parola said the contract fell through “because, from the developer’s standpoint, they couldn’t make the plan work from a financial standpoint. Apparently it was not attractive enough to them because the financial benefits being provided in tax relief, etc., were insufficient to make it work for them.”

The Engel Burman Group did not respond to a request for comment.

Parola said the IDA has been in touch with Town Council members overseeing the Baldwin redevelopment efforts and “will do what is acceptable for the community only, so that means no six stories, no project that would overburden the infrastructure and the roadways.”

It’s not the first time big-time developers have pulled out, Parola added. The Engel Burman Group was the third in 10 years to take its business elsewhere.

“I know it’s frustrating because it’s an eyesore, but ultimately you want to put something in there that’s going to please the community and improve the area,” Parola said. “We want to make sure the benefits don’t exceed what the developer is putting in there.”

Gillen also said, at the meeting, that it would make more sense to focus on developing the area near the railroad, and “then let it grow.”

She recalled when Nassau County and a company, BHP, conducted a post-Hurricane Sandy commercial corridor resiliency study, which determined that Baldwin would benefit from an overlay zone.

“Instead of picking one person and saying, ‘You’re the lucky winner and you get to redevelop this parcel,’ and think that that’s going to spur growth all throughout the Baldwin corridor, let’s create zoning that will incentivize developers to want to come and develop and build some beautiful things here,” Gillen said. “That is what we’ve been working on since the Baldwin deal fell apart.”

She added that the town was waiting to hear if Baldwin will receive a $10 million grant from the Long Island Regional Development Council, a state-appointed council, which the agency said would help to “develop a downtown strategic investment plan and implement key catalytic projects that advance the community’s vision for revitalization.” The grant is expected to be awarded to a Long Island neighborhood this month.

The town is also drafting an environmental impact statement that would be released to the community for public input.

“We have to do a SEQR analysis for the State Environmental Quality Review Act,” Rebecca Sinclair, Gillen’s deputy chief of staff, said, “so we determined that there will be some environmental impacts by doing dense housing around the train station and then working throughout the corridor.”

“We expect to adopt final zoning overlay and design guidelines in the fall of this year after the report is published,” Fricchione said, “and community members have an opportunity to weigh in on what they think about it.”

Community members are to be invited to review the report and discuss anything they want evaluated.